Making Tax Digital (MTD) software

Making Tax Digital – Avalara VAT Reporting solution

What are the new UK Making Tax Digital (MTD) requirements for VAT returns, and what must businesses do following the latest 1 April 2021 implementation requirements? Sign up for a FREE demo of Avalara’s MTD VAT Reporting software, which is already helping thousands of businesses be fully compliant for their UK and international VAT filings.

Avalara’s solution – a seamless digital journey

Avalara’s VAT Reporting software, reviewed and 'recognised' by HMRC, ensures a seamless digital journey for your UK VAT filings to comply with the April 2021 phase 2 of MTD.

This includes:

  • Extracts from your accounting records of VAT sales and purchase transactions to warrant that your business is compliant with the new digital recording obligations
  • Automated data and VAT validation checks to catch errors and omissions which could result in VAT audits and possibly fines
  • Automated capture of final, filed returns, including logging the Submission ID issued by HMRC as confirmation of filing
  • Simplified manual adjustments, reconciled to source data from your accounting data, to maintain full integrity of the audit trail and ensure there are no irregularities in future investigations
  • Account login, with full history of all prepared and filed returns

MTD for VAT: Penalty regime starts 1st April 2021

On 1 April 2021, the second phase of UK Making Tax Digital (‘MTD’) for VAT programme was implemented. HMRC has offered an option to apply for a further extension to this deadline if it can be shown there is no reasonable fix to legacy IT issues and the operation of an uninterrupted ‘digital journey’. Businesses applying for the extension must include a comprehensive plan to resolve any break in the digital journey.

April 2019 – new UK digital filing obligations overturned previous processes

Making Tax Digital requirements

Since 1 April 2019, all UK VAT registered businesses above the £85,000 sales threshold were obliged  file digitally. This is the first stage of the UK’s MTD initiative, to digitise tax records and submissions.

After 1 April 2021, this was extened in phase 2 of the MTD for VAT

What changes in April 2021?

  • MTD outlaws manual records
  • VAT sales and purchase transactions must be stored digitally
  • Manual adjustments and cosolidations of VAT date in spreadsheets
  • 'Copy and paste' in spreadsheets is not permitted
  • Manual keying-in VAT return data from spreadsheets into HRMC’s online portal stopped

Digital links must be maintained between any accounting package or spreadsheet through to HMRC’s new filing API.

Join thousands benefiting from using Avalara’s VAT Reporting

Thousands of companies already benefit from having their VAT returns prepared on Avalara’s VAT Reporting technology.


Avalara VAT Reporting simplifies the process of filing indirect tax returns in multiple countries, increasing efficiency and reducing the risk of non-compliance. Our VAT reporting solution uses data from your ERP or accounting system to automatically produce indirect tax returns that comply with local filing requirements. This minimises the time it takes to create and submit returns, and automates compliance checking.

Comprehensive filing

Avalara VAT Reporting provides automated statutory filings in over 40 countries, for the 27 EU member states and beyond, including VAT returns, Intrastat, ESL, VAT books, VAT SAF-T and numerous local listings.

Powerful VAT reconciliation

Avalara VAT Reporting reconciles your data automatically against other sources such as GL and Intrastat data and perform inter-company reconciliations to help ensure correctness.

Data checking

Avalara VAT Reporting validates and enriches your data from external sources such as VIES and the ECB, whilst performing over 150 checks for indirect tax errors, to help you stay compliant.

Centralised VAT management

Avalara VAT Reporting provides powerful multi-language capabilities and detailed country-specific content, so you can standardise, document and centralise your process regardless of where your personnel are located. This is ideal for shared service centres (SSC’s) or for providing visibility and control to distributed operations.

Sign up now for a demo of Avalara’s MTD filing solution

Our VAT Reporting MTD tool can now file UK VAT returns. You can register with us for a FREE demo, and speak to our UK VAT technology team about how VAT Reporting can work to ensure you are fully compliant for the April 2021, phase 2 MTD obligations.